Chair of AIM issues letter to its members about Apple's new streaming service following concern from Beggar's Group and a number of musicians

The chair and CEO of the Association of Independent Music (AIM) has issued a letter to members of the independent label group saying that Apple Music's new streaming service, launched to rival Spotify and Tidal, could have "catastrophic" results for smaller record labels.

As FACT report, Alison Wenham says that the initial royalty-free trial period is "a major problem for any label that relies on new releases rather than deep catalogue, as the potential for this free trial to cannabalise not only download sales, which remain a very important revenue stream, but also streaming income from other services, is enormous." Wenham concludes that the independent label sector, and particularly small labels, "cannot withstand such a potentially catastrophic drop in revenue." The statement comes after a leaked contract devised by Apple Music revealed last week that Apple does not want to pay royalties to right holders while they are using the three-month trial period that the company is offering in order to entice subscribers.

Wenham's letter stresses that it is up to each individual label to make their own decision on whether or not to sign up to the contract that Apple are offering, but the statement is coming in light of a number of AIM's members voicing their concerns. "It is AIM’s view therefore that, in its present form, this agreement sadly does not meet a standard of commercial fairness that we can endorse."

Earlier this week, Beggar's Group, a company that owns and distributes music from labels such as XL, 4AD and Rough Trade, published a statement voicing their concerns over the royalty-free period, saying: “in many ways the deal structure is very progressive, but unfortunately it was created without reference to us, or as far as we know any independents, and as such unsurprisingly presents problems for us, and for our coming artist releases." They also questioned whether smaller, independent labels were being treated on a level playing field with major labels. You can read the full statement here. A number of musicians, such as Anton Newcombe of the Brian Jonestown Massacre, have also voiced their displeasure over Apple's offer.

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